This case involved consideration of the legal estate given to a 16-17 year old accommodated by a local authority under the duties as set out in s193(2) of the Housing Act 1996. The appellant (E) had originally been granted a ‘non-secure’ tenancy under a written agreement when aged 16. Following complaints about her behaviour in the property the Local Authority had, in accordance with the procedure as set out in the written agreement, firstly served a notice to quit and then later obtained a possession order against her. E challenged the making of this order and the Court, in considering whether the order should have been made, looked beyond the nature of the agreement and into the position of a local authority required to secure accommodation for minors who were, because of s1(6) of the Law of Property Act 1925, too young to hold a legal estate in land. E sought to establish that the written agreement was in effect a declaration by the Local Authority that it would hold the property in trust for her (under powers conferred by schedule 1 of the Trusts of Land Appointment of Trustees Act 1996) and that by serving the notice to quit the authority had acted in breach of that trust. The Local Authority argued that the terms of the agreement were intended to set up an equitable tenancy and so the Trustees Act would not apply.
The Court confirmed that a local authority was able to enter into a written agreement with a minor and, by doing so, hold the property in trust for them until they reached their 18th birthday. The Court did not accept the Local Authority’s argument that such arrangements would be unlawful either because it effectively fettered the Authority’s discretion to manage their housing stock (as permitted under s21 Housing Act 1985) or exceeded their authority to dispose of land as set out in s35 of the Housing Act 1985. The Court also confirmed in the alternative that, had it wished to do so, the Local Authority could have granted an equitable tenancy to E as a minor, Kingston Upon Thames v Prince (1999) applied. However, in this instance, the written agreement had not specified any such limitation. It was on the same terms, indeed using the same standard form, as those providing full legal tenancy to adults owed a duty under the Housing Act 1985. The Court of Appeal highlighted that a landlord who had full capacity to grant a legal tenancy could not later seek to establish that it had not granted a full legal tenancy without specific and express mention of any limitation within the document setting out the terms of the agreement. Whether a tenancy arose in equity was not something that the landlord could determine but one which would arise only in specific circumstances as set out in equity. As the Local Authority had not specified any such limitations in this case the Court of Appeal held that the 1996 Act applied. The Local Authority acted both as the lessor of the land and as a Trustee of that land for E. The Local Authority, as lessor, could not serve notice to quit on E without instigating a breach of Trust. As a consequence of not being able to issue a notice to quit the Local Authority could not then rely on the service of the said notice as grounds for a possession order and therefore the possession order, previously granted, was quashed.
The Court of Appeal commented that a Local Authority should, when looking to provide accommodation to minors, seek to ensure that any agreement was a genuine grant of a licence until the person turned 18. It suggested that this could be easily achieved if, for example, the social services department were permitted access to the premises to monitor the young person’s welfare thereby preventing exclusive possession and so frustrating any chance that the agreement could be seen as creating a tenancy.